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Washington — The Trump administration is dropping an antitrust investigation into Ford Motor Co. and three other automakers that agreed in principle with California to stricter fuel-economy rules than those backed by the president.

The decision to back down, confirmed Friday by Ford, represents a major de-escalation in a feud between the Trump administration and California over gas mileage rules that has engulfed the nation's automakers. 

The Justice Department declined to comment. 

The DOJ investigation of Ford, Volkswagen AG, Honda Motor Co. and BMW AG, launched in September, came two months after the automakers reached a deal with California to voluntarily increase the average fuel economy of their fleets to about 50 miles per gallon by the end of the 2026 model year. 

In a letter obtained by The Detroit News when the investigation was launched, the Justice Department said it was concerned the agreement between the auto companies and California "may violate federal antitrust laws." The agency said it was inviting the automakers to meet with federal regulators "in order to help us determine whether that is a possibility and what are the appropriate next steps we should take."

The investigation took place amid a widening battle over mpg rules between the Trump administration and California. The fight ensnared automakers in a potentially protracted legal battle likely to end up in the Supreme Court.

The move by the automakers to agree separately with California to higher mpg standards bucked the Trump administration's two-year push to freeze fuel-mileage rules at about 39 mpg for model years 2021 to 2026. The administration has since slightly backed on the push to roll back the Obama-era mpg rules, calling for reducing the required annual fleetwide average mpg increases for carmakers for model years 2021-2026 from the original 5% to a less-stringent 1.5%.

Mileage rules for cars have been at the center of controversy since the earliest days of Trump's presidency. 

Carmakers had asked the Trump administration to take another look at fuel-economy rules. Those Obama-era standards would have required automakers to increase fleetwide fuel economy by about 5% annually toward a goal of 54.5 miles per gallon by 2025. The Obama administration moved to finalize the rules ahead of schedule after Trump's 2016 victory, setting off a chain of events that has led to the current dispute.

Trump went beyond what most automakers were seeking by proposing a freeze that would lock in mpg rates until 2026 at 2020 levels, when carmakers would be required to produce fleets that average about 39 miles per gallon.

California, which helped craft the Obama-era rules, sued over the rollback and has promised to also sue over the revocation of its right to set its own more-stringent mpg requirements. The nation's largest state accounts for 12% of the U.S. auto market. Thirteen states and Washington, D.C., have adopted California’s gas mileage rules.

Under the deal negotiated directly between the California Air Resources Board and Ford Motor, Volkswagen, Honda and BMW, the carmakers would voluntarily increase the average fuel economy of their fleets from 2021 levels by 3.7% per year, reaching an average of nearly 50 mpg by 2026.

Environmentalists and consumer advocacy groups in Washington have sharply criticized the Trump administration for moving to relax the rules.

klaing@detroitnews.com

202-662-8735

Twitter: @Keith_Laing

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